It has been a while since we checked in on the Archdiocese of Washington’s lawsuit against the government mandate to insurance to employees covering abortifacients and contraceptives without a co-pay. The legal clash is interesting and it is clear that ADW’s counsel are capable of excellent legal work. What is even more interesting is how the case is being litigated, which is quite leisurely given what we are told is at stake.
Earlier this year the Administration adopted a regulation with the force of law that required employers to provide certain minimum coverage without co-pay. That coverage includes an abortifacient drug, sterilization, contraceptives, and counseling for women and girls with reproductive capacity. The regulation included a narrow exception for religious organizations that primarily serve members of its faith. The ADW and the other plaintiffs do not meet this standard because they serve non-Catholics in the main.
Under the regulation, ADW faces two choices. It could provide health insurance without the intrinsically evil services. According to ADW’a CFO Thomas Duffy, that option will cost the ADW $76.65 million in new taxes. Alternatively, the ADW could default on its “moral obligation” to provide health insurance to its employees. Mr. Duffy estimates that this option will cost the ADW $4.14 million.
The lawsuit started in May. After that, we had homilies, letters, and routine exhortations about how the new taxes would devastate religious freedom and our mission to serve all.
The litigation started slowly. The federal government had 60 days to respond to the suit. In late June, the Supreme Court held that the Constitution permitted the government to impose the penalties as “taxes” so long as they remained non-“coercive.”
If the point of the lawsuit’s timing was to have a vehicle in place to get a judgment protecting ADW against the tax, it was time for Plan B.
The government moved to dismiss on two grounds. Its argument was that it would not enforce the law against the ADW and was actively considering changes. Thus, according to the government, the suit should be dismissed. This argument worked in other lawsuits about this issue.
ADW and the other plaintiffs were ready. They argued that the coercive effects of the mandate could be felt now in that choices affecting FY 2013 needed to be made and planned for now. Interestingly, the plaintiffs said that they planned to conduct “discovery” after the motion was resolved.
All of this suggests that there are behind-the-scenes negotiations going on and that they are quite serious. Most litigation ends with settlements. What happens in court is often intended to alter the other party’s settlement posture rather than to ‘win’ in court. It is nice to win, but if you can get most of what you want at the table, that is often, but not always, better. The situation where it is not better is when the lawsuit is intended to defend a non-economic principle or where the future cost of compromise for either side cannot be assessed and handled.
Looking at the papers, it appears that both sides, but especially the plaintiffs, are in settlement mode. The government’s motion is weak. It relies solely on general principles and does not come to grips with the abundant case law casting doubt on its position. But, given that two other judges have accepted similar arguments, it was worth bringing. There is a real, non-zero chance that the suit will be tossed. That gives the government leverage.
ADW and the plaintiffs filed a blistering response, the quality of which is a credit to their legal team. However, there are strong indications that something is going on behind the scenes. This is a case of the dog that is not barking. The ADW’s papers make a strong factual case that the rule is hurting now. Yet, the plaintiffs are doing nothing to expedite the case. For example, the papers say that the plaintiffs want discovery (requiring the government to appear for depositions, produce documents etc) into motive. That would be rare in this kind of case any discovery would come months later in the process and meaningful responses months and months afterwards. Indeed, motive – in the sense of understanding the deliberations is probably privileged and would not have to be produced anyhow.
Another fact that emerges from the papers is that ADW has triggered the internal processes that prudence requires if the mandate were to stay in place.
So what’s going on? My guess is that there are, and have been, negotiations going on from the beginning. The government knows that it has time on its side. It also knows that as time passes pressure on ADW and the other plaintiffs increases. It is using that leverage.
ADW and the other plaintiffs probably have a different calculus. They want to preserve Obamacare. They think that Obama may see some advantage in ‘acquiescing’ to the Bishops in October in order to deny Romney a percentage of the Catholic vote since Obama is now ‘standing up for religious freedom.’
It seems clear that ADW thinks that a settlement is likely — they don’t seem to be planning for a loss.
Of course, this informed speculation is just that — speculation. The only sure thing is that there are surprises yet to come!
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